Bridging Gaps in Healthcare: Interview with Alvaro Cepeda - General Manager, Polar Salud, Mexico

Meeting highlights: 

• Transferring know-how: from an Education Impact and entrepreneurial background to healthcare 
• Alvaro Cepeda's unique background, experience, and perspective transferred into a healthcare vision and project. 
• The Vision Behind Polar Salud. 
• Shedding light on the growing market opportunity identified in the private healthcare provision to the C segment. 
• Shaping the Future of Sustainable Healthcare in Mexico. 
• Polar Salud and a new generation of executives are shaping the future of sustainable healthcare in Mexico. Physicians & Patients experiences, market consolidation opportunities, and operational synergies through shaping clusters.  
• Data: as the backbone driving operational efficiencies and speedy plug and play of new assets to the group. 
• A Conversation About environmental and societal responsibility. 
• Vision, Growth, and Innovation: 2025 gearing towards doubling capacity. 

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EF: What opportunities did you identify in the market when you started Polar Salud? How does it compare to the real estate industry and what key lessons or transferable skills have you gained from this experience? 

AC: Polar Salud is essentially a spin-off idea from Lottus Education. Lottus Education is and has always been, an impactful initiative focused on education and innovation. Today, it stands as the third-largest player in private education in Mexico. When you consider institutions like Tec de Monterrey, which ranks second and operates as a non-profit, Lottus effectively positions itself as a close second in the sector. 

Lottus Education's success is largely attributed to its unconventional approach. It was not developed by insiders from the education sector but rather by a team of private equity professionals, financial experts, and operational specialists from various industries. This diversity in perspective and expertise was a key driver of its success. 

Jesus Lanza, the individual who led the consolidation and growth of Lottus Education is now the chairman of Polar Salud’s board. Additionally, some of our other key partners come from the hospitality industry, specifically from Sancus, making this project a rich blend of experiences and strategies from different sectors. 

We built a management team based on the same principles used in consolidating an impactful project like Lottus Education, but this time applied to healthcare. While healthcare is an entirely different field—especially considering the technical aspect of the medical side of the business—the core idea remains straightforward: bring an entrepreneurial mindset and modern ways of working, often seen in startups or fast-growing companies, to a sector unaccustomed to such approaches. 

This shift immediately drives positive outcomes by introducing a growth-oriented and impact-driven perspective. Of course, there are natural limitations, particularly on the medical side. However, when you come from a technological or non-medical background, you understand how a high-performing team, mindset, and way of working can significantly influence even highly technical fields. This is a common denominator in most fast-growing or startup ecosystems. 

In Mexico, we identified a pressing need for better healthcare infrastructure, particularly among the emerging middle class—the C, C-, and C+ segments. This up-and-coming demographic is underserved, and we saw an opportunity to make a meaningful impact on their healthcare access and outcomes. 

In Mexico, the private healthcare market catering to the middle class is both fragmented and underserved. Groups like Mac target a slightly higher demographic than we do, making them indirect competitors. However, I believe there is enough space in the country for multiple players, including Polar Salud, Mac, and others. The key is to clearly define the asset class and the population segment we aim to serve. 

Polar Salud operates as a private healthcare management platform. This approach allows us to maintain a lean management structure while vertically integrating the hospitals we acquire as efficiently and fast as possible. Our growth is primarily inorganic, though we also engage in some organic expansion, such as building new hospitals when we acquire smaller groups that are already in growth phases. However, our core business lies in acquiring functional, often family-run hospitals, and transforming them through integration into our platform. 

This integration immediately drives value by consolidating a fragmented market. Small and medium-size hospitals and clinics in Mexico operate independently, which limits their potential. By clustering our hospitals in specific regions rather than spreading them across the country, we create strong regional positions. Consolidation enables us to improve operational efficiencies, unify branding, enhance customer loyalty, obsess with patient and doctor experience, centralize data and enable digitalization across our hospitals. The most important aspect of this approach is that it allows us to elevate both the patient and doctor experience, focusing on the customer journey on top of the procurement of quality and safety, which are often overlooked in healthcare. Unlike the startup world, where customer experience is a priority, healthcare has traditionally neglected this perspective. 

We see this as an opportunity to change the narrative. Patients, often in their most vulnerable states, should not have to rely on luck for a good experience. Likewise, doctors, who frequently move between hospitals with little loyalty, deserve a more fulfilling professional environment. By addressing these gaps, we aim to create an environment where both patients and doctors feel valued and supported.  

EF: What advice would you give someone who wanted to invest in the healthcare sector? 

AC: The private healthcare market in Mexico is fragmented, with small, family-run hospitals spread across the country. Some of these hospitals are exceptionally well-run, to the point that there’s little room for improvement from an operational standpoint. But even with the best-run facilities, when you start clustering them together, the synergies you unlock are exponential. For instance, just something as basic as bulk purchasing of medicines creates immediate value through economies of scale. 

My advice—or more like a perspective—is to not let the technical side of medicine intimidate you. Of course, the medical and technical aspects are critical to the business, but many of the challenges can be solved with pragmatism, logic, and sound business practices. You do not need to handle both sides yourself. What is important is having the right structure in place to let the experts handle the medical side while you focus on building and innovating around it. 

At Polar Salud, we have been intentional about separating these two areas, while striving for a better all-around business. For example, we have a Chief Medical Officer, Juan Francisco Fernandez Pellon, who is incredibly well-respected in the industry. His expertise and reputation are crucial for the medical side of the business, and he is also open to adopting the new ways of working we bring to the table. This structure allows us to project our ideas and innovations onto the medical side without me being directly involved in technical operations. 

This approach is not new. It has been done successfully in other industries and is entirely possible in healthcare. The key is to let go of the fear factor surrounding the technical side, knowing that with the right team and the right questions, you can find opportunities and make meaningful changes. 

EF: How do you approach attracting physicians and medical doctors to fill that gap, especially as a relatively new player in the ecosystem? What’s your pitch to bring them on board? 

AC: When we acquire a hospital, we inherit its legacy, including a small group of top doctors who typically generate 30% or more of the income. This is common in both large and small hospitals worldwide, and these doctors already have certain benefits, some more institutionalized than others, but they are accustomed to working in a particular way. 

When we purchase a hospital within a cluster—or even a second or third one—we are essentially working with the same group of doctors across those facilities. The way it works is that the elasticity of the patient determines where they will go for care. For example, in a cluster like Valle de Toluca, where we have a strong presence if a patient is paying out of pocket for elective surgery, the doctor will direct them to one of our hospitals. If the patient has insurance, they might be referred to another one of our hospitals in the cluster that caters to a slightly higher segment. 

Ultimately, it is the patient’s needs and budget that determine where they go, but the doctor, now working with Polar Salud across the cluster, benefits from both interventions. This makes it very hard for other hospitals to compete with us, in a positive sense, of course. We offer a range of benefits for doctors who work across multiple hospitals in the cluster, and as we add more units, those benefits grow. 

These benefits include common commercial perks like discounts after a certain revenue threshold is met, access to premium rooms for their patients, and priority scheduling for surgeries. However, the most significant advantage is the financial benefit doctors get from working across multiple facilities within our cluster.  

We need to recognize that this is a business, and by operating within a cluster and offering our consolidated services, we can provide doctors with more financial opportunities. Essentially, doctors can benefit from a larger patient base because the cluster allows us to assign more patients to them. This addresses a key issue where doctors often feel they bring patients but do not always receive an equivalent return. Hospitals have the infrastructure, brand recognition, and emergency services to secure patients, but with a cluster, you can offer doctors a more consistent flow of patients. The key is using tools like performance marketing and startup-style strategies to influence those numbers and ensure both doctors and hospitals thrive in the relationship. 

So, with a larger patient base, doctors are more inclined to bring patients into our hospitals. Doctors who were already working across two hospitals now enjoy consolidated benefits as part of the Polar Salud network. This creates a strong alignment where I do not have to push too hard. The benefits are clear to them, directly impacting their earnings, and they do not have to take my word for it—they see the value reflected in their pockets.  

That is why we function as a platform. We have two key roles: managing day-to-day operations and creating an integration playbook that allows us to quickly bring hospitals and their commercial sides into the fold. The commercial aspect for doctors is built into our playbook, so once we integrate, it is a smooth process. After about three months of operating a hospital, doctors start seeing more money in their pockets. Plus, we can control prices or maintain them, even as we drive more business to the hospital. This is possible because we increase volume, not costs. 

EF: What efforts are you making to build a data infrastructure and architecture that can optimize resources and improve decision-making? 

AC: Coming from startups and real estate, I have noticed that there is a huge lack of reliable data in Mexico across industries. For example, in real estate, there is no MLS, no asking price, or closing price information. We saw this gap and the first thing we did in a previous project was leverage Business Intelligence (BI) and data to understand the real numbers, and it is the same issue in healthcare. 

In healthcare, the most reliable source of data is INEGI, but the private sector faces a challenge when it comes to consolidating and utilizing data. Our mission at Polar Salud is to establish accurate, timely data across our hospitals. We want to be able to compare our facilities with each other, as well as with broader market data. That is why we have been working with a business partner to develop artificial intelligence models to make this comparison between our hospitals and general healthcare data. 

We work with a data-as-a-service provider for these models instead of developing them in-house, and this has become our first step after acquiring a hospital. We start integrating the data even before the hospital is purchased. This means that by Day 30 post-acquisition, we can operate with data seamlessly aligned with the rest of our network. Of course, integrating software systems like ERP comes later, but the initial data integration is a critical first step. 

This approach is kind of revolutionary. Traditionally, companies would struggle to integrate data because of the complexities of choosing the right software, which can take years. Our approach flips that on its head, where the focus is on getting the data right first and then selecting the software to complement it. 

Internally, we have been able to make progress with our own data, but when it comes to comparing ourselves to the broader market, there is no reliable external data to benchmark against. However, by connecting our own data to public data sources, like those provided by INEGI, which are specific and accurate, we can start to create a more comprehensive picture. Over time, this will not only give us a competitive advantage but could even open up opportunities to sell that data, especially if we develop our own software. After all, software alone is not the key anymore—the data is. 

Looking ahead, we are considering developing our own ERP system, which will integrate AI and smart data, enabling us to create dashboards and reports almost instantly. The data we’re collecting is clean enough that, with tools like ChatGPT, anyone can create the specific reports they need—whether it is a dashboard, a PDF, or an Excel sheet—all within seconds. This speed and flexibility are crucial for us to stay agile, especially since we need to act quickly. 

Why do we need to move fast? There simply are not enough hospital beds in Mexico. The ratio is one bed for every 1,000 inhabitants, which is one of the worst numbers in Latin America. In countries like the U.S., that would be unthinkable. So, we need to be fast to meet the growing demand for healthcare services. AI and big data help us accelerate this process, not just as a strategy but as a necessity. We need to act quickly to address the gaps in healthcare and deliver the services our community urgently needs. That is our mission. 

EF: How can we create a more sustainable healthcare system in Mexico?  

AC: The first thing the industry needs to acknowledge is that sustainability is not something we do because it is trending or because others tell us to—it should be integrated into the core of our business. It is a matter of common responsibility, not just a marketing strategy or something to impress investors. For many in Mexico and Latin America, this is still a mindset shift. Sustainability should be a part of our values, embedded in everything we do, and not something we do for recognition. It is just part of being a responsible business. 

At Polar Salud, we have made sustainability a core part of our company’s mission. It is included in our company’s business declaration—it is in our business values, and it shows up in everything we do while operating our business. While the healthcare industry is not a major emitter of carbon compared to other sectors, it does contribute about 4.4% of global greenhouse gas emissions, mainly from the supply chain and hospital waste. Hospitals produce a lot of waste, and some of it is non-recyclable, but there is a lot we can do. 

For example, we are already producing 80% of our energy through solar panels at Polar Salud, and this is just a baseline—this should not be something to celebrate, it should be the norm. We are also working closely with an environmental service provider to ensure we are serious about sustainability. But we do not want to just create a green initiative within the company. We need to make an impact on the local communities where we operate. So, rather than just donating to a foundation, we are creating community-based projects that directly address our carbon footprint. These are the types of projects that will have a lasting impact, and they need to be local and tailored to the community. 

By partnering with the right service providers, who are data-driven and experts in carbon reduction, we can ensure that our efforts are targeted and effective. We can also fund projects that go beyond environmental impact, such as social programs that address the needs of the communities we serve. It is about doing it the smart way and making sure the money spent creates an impact. This is not just about saying we did something; it is about doing something meaningful for our patients and the communities we work in. 

We want to provide accessible healthcare services to those who are able and willing to pay, while also offering the best possible care at affordable prices. To achieve this, we focus on being efficient, leveraging the operational synergies we have built, and minimizing waste. 

One of our future projects is a social clinic in Valle de Bravo, near Mexico City, which will be completely non-profit. The clinic is being built and equipped by Andrea Hernandez, an extraordinary individual who funded almost the entire project. We will take over the operations because, as healthcare experts, we can bring the necessary operational efficiencies, rather than having someone without experience running it. 

The clinic will serve indigenous communities from nearby towns as well as local residents. It is located in an area where there are many weekend visitors, so we will be able to address both the needs of permanent residents and temporary ones. This will have a positive impact on the community, and it is strategically placed near one of our clusters, allowing us to leverage synergies and make the most of our resources. We need to be smart about where we invest our money and where we can have the greatest impact, making sure each peso spent creates the most value for the community. 

EF: What key decisions are you planning to make in 2025 that you expect will have a significant impact? How do you envision the future of Polar Salud? 

AC: The socio-economic status of the Mexican population is improving, primarily driven by growth in the C segment, which already represents 40% of the population. This segment is expected to increase by 15 million people by 2030. Alongside this, Mexico is experiencing demographic shifts, including a decline in the younger population due to decreasing birth rates, while the aging population is on the rise. Currently, 14.7% of the population is over 60, a figure expected to reach 30% by 2050. 

With these demographic trends, the demand for healthcare services is growing. This is not merely a market opportunity but a demographic reality. The private sector needs to move quickly to address the increasing demand, as the public sector, constrained by limited resources, cannot meet these needs. Despite good intentions, the public sector simply lacks the financial capacity to provide adequate healthcare. 

For Polar Salud, the future involves rapid expansion to meet these needs. Currently, with three locations in less than a formal year of operation, 150 beds, and a similar number of consulting rooms, the goal for 2025 is to double the number of beds to at least 300. However, even this growth will only partially address the overall demand for healthcare in Mexico. To truly make a dent in the problem, Polar Salud will need to keep scaling at a fast pace, building on the momentum from current and upcoming projects. We have a great team and partners. Our interests are aligned, and we will rise to meet this challenge.